View from City Road: Tide seems to have turned at Saatchi

The smiles may have been rather fixed but yesterday's half-year figures from Saatchi & Saatchi suggest that there is enough to justify the apparent reconciliation between Charles (I have more quarrels with my wife) Scott and his chairman, Maurice Saatchi.

For most of the past year the advertising industry has been hugely entertained by tales of clashes between the creative spirit of Maurice Saatchi and Mr Scott's ruthless and apparently sometimes ineffective bean- counting.

Cost-cutting is finally beginning to take effect. At the same time, top-line revenues are on the turn, with some important new accounts clinched of late. So everyone is happy and harmony is returning to what was a deeply demoralised company.

Saatchi & Saatchi was a monument to Eighties hubris. Massive overexpansion into advertising agencies and management consultancies, culminating in the bizarre attempt in 1987 to merge with Midland Bank, or failing that, Hill Samuel, swiftly unravelled.

Shares that traded at more than pounds 50 in the mid-Eighties could be bought for barely more than pounds 1 in 1992 as the company endured gigantic write-offs and financial reconstructions. Morale has been at rock-bottom, a self-feeding process in the advertising world where business tends to go out of the door once the ponytails begin to droop.

Finally the tide seems to have turned. Excluding the loss of the big Chrysler and Helene Curtis accounts and exchange rate changes, underlying revenues at Saatchi grew 3.5 per cent in the first half.

Account losses were hugely outweighed by five big wins, including Warner Lambert, the hefty UK National Lottery account and Qantas.

Saatchi is also more optimistic about the market itself. Big corporations which squeezed media advertising in favour of trade promotions are loosening their purse strings again.

Payment of a serious dividend is still a long way off, and with the shares up from 128p to 176p so far this year, much of the good news has already been absorbed. None the less, the corner has plainly been turned. It is often said that the City will never forgive Maurice Saatchi for what happened. Memories are short, however. Judging by this set of results, the comeback has already begun.